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Foxconn to Build Cars for Electric-Vehicle Startup Fisker

The EV market gets more interesting.
(Eric Broder Van Dyke)
(Eric Broder Van Dyke)
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“Foxconn Technology Group, the world’s biggest electronics contract manufacturer, has agreed to assemble cars for electric-vehicle startup Fisker Inc.,” WSJ writes.

Why It Matters: It’s a notable snag for Foxconn, which already assembles the Apple iPhone. The deal signals the electronic manufacturer’s enthusiasm to get involved in the automotive sector; it’s been looking to “diversify beyond its core business of contract manufacturing for electronics.”

The Details:

  1. Foxconn and Fisker have “signed a memorandum of understanding to jointly produce more than 250,000 vehicles a year.”
  2. Through the arrangement, Foxconn would make Fisker’s second vehicle, “a higher-volume electric car that the carmaker aims to start building in the fourth quarter of 2023.”
  3. Foxconn would build the vehicle on its proprietary underpinnings and it would be sold in North America, Europe, China and India.

Trend Watching: A deal like this isn’t uncommon. “In recent years, some electric vehicle startups like Fisker have been focusing on designing cars while outsourcing vehicle production, in a challenge to the traditional business model in the automotive sector, in which established carmakers designed and produced their own vehicles.”

  • A wave of tech companies is trying to partner up and enter the space. Apple had reported talks with Hyundai about a potential deal but talks have since broken down.

For Foxconn, it’s the first time it will actually manufacture vehicles and tie-up with a U.S.-based electric vehicle firm.

  • It also has agreements in place to work with Stellantis N.V. and China’s Zhejiang Geely Holding Group.

The Takeaway: Fisker began trading in October after going public through a SPAC. Its stock finished Monday at $16.29. “The company, which has told investors it expects its first revenues in 2022, is set to update investors on the results of its first quarter as a publicly-traded company after Thursday’s close.”

Justin Oh:

I’m not quite sure how I feel about applying the consumer electronics supply chain to automobiles. It might work for Fisker, whose Ocean is priced starting at $37,499 and aimed closer to the economy segment than the luxury one.

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